GMS 200 Lecture Notes - Lecture 6: Pareto Principle, Sun Microsystems, Acronym

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GMS 200 Global Management Lecture 6 Tuesday Marc 4,2014
- Hidden symbol in FedEx means the speed of the delivery which is the arrow
- Sun microsystems unique logo is the sun logo symmetrically
- Clue Natic companies uniqueness is that the whole logo itself symbolizes the key to the
maze
Management Planning
Cases:
Transferring Convicts:
-Towards the end of the 18th century, England began sending convicts to Australia and a lot of
convicts died along the way with overcrowding, poor nutrition and little or no medical treatment
and 12% convicts died from 1790-92 and 37% of the convicts dies in one sentence and some
entrepreneurial captains hoarded food and medicine and sold them upon rival
HOW MIGHT CAPTAINS BE CONVICTED TO TAKE BETTER CARE OF THEIR HUMAN
CARGO?
- Gov’t decided to pay captains a bonus for each convict that walked off the boat in
Australia alive
Chile-Hyperinflation (overall price of goods increase)
- During a period of hyperinflation in Chile, the story is told that the government’s
imposition of the maximum price made it unprofitable for suppliers to sell bread the
legal max. was below the cost of production
- A simple prediction would be that bread would disappear from the shelves
If you were a baker how might you respond?
- Reduce size of the bread making it more profitable
- Selling it in a domestic market and selling it at the higher price
- Substitute products that are cheaper
- Input new technology ( to make the production for efficient)
- Their actual response was to shrink the loaf of bread until the cost of the loaf fell below
the legally mandated price
- Enterprising bakers sold the raw dough in bags with water so the minimum weight
could be achieved
- External environments are not always in hand
Euro Disney- Case Study
- Until 1992, the Walt Disney company had experienced nothing but success in the
theme park business
- Its first park opened in California
GMS 200 Global Management Lecture 6 Tuesday Marc 4,2014
- Then opened in Japan which was a huge success
- Then Disney execs turned attention to France especially Paris
- Why Paris? Because French gov’t expected the project to create 30,000 jobs and to
contribute a billion a year offered and provided $750 million loans at below-market rates
- Spent millions of dollars on subways and railroads connecting Europe to Disneyland
- Number of people within 2-6 hours of the Paris site
- Within a 2-hour drive 17 million and 4-hour drive 41 million and 6-hour drive 109 million
and within a 2 hour flight 310 million
- To summarize: planned to open in 1992 and 4.4 Billion enterprise over 5000 acres and
will grow in next 2 years to an area one fifth of Paris itself
- 2nd largest construction project in Europe after English Channel
-What would you decide and why?
-Would you require any other data for your decision? Which ones?
-Would you price tickets at par with Florida or lower or higher than Florida why?
- Results were 12 million visits more than projections and tickets were higher than
Florida and revenue projections were not met because of the distance being so near
people did not want to stay there
Why Planning Creates Value?
- Leads to an increased match between the internal organizational conditions of the firm
and its external environment
- Creates awareness of problems, strengths and weaknesses
- Improves focus and flexibility (avoids wasting time, takes in to account all factors and
focus on critical ones, Pareto principle, allows systematic resource allocation)
-Pareto Principle: 80, 20 principle (also known as) which means most of the time the
20% of the activities responsible for the success and when you plan you focus on that
20%. Once you known you will focus and it can be applied to any concept. Make sure
focus 20% critically
- Minimization of effects of adverse conditions
- Gives advantage over competitors (firms that do regular planning do better than other
organizations who don’t plan)
- Helps stakeholders to plan for their future ( suppliers and distributors)
-Beware of Planning Paralysis: notion that you take too much time planning and do
not execute them ( the plans into action)
Why people avoid planning?
GMS 200 Global Management Lecture 6 Tuesday Marc 4,2014
- Poor reward structures (planners do not get rewarded because people who execute/
put the plan into the action get rewarded)
- Fire-fighting: Some people love to handle 10 different things and can make best
decisions while they are under pressure and they are motivated under pressure
- Opposition to time and expense of planning: don’t want to use the time/waste
- Resistance to change: people at a basic level don’t want change and those who don’t
want change avoid planning
- Fear of failure
- Prior bad experience: Managers who planned before may have done bad and that
maybe and influence
- Overconfidence: (extremely important)
Planning Process:
- Begin with a vision/mission of the company
- Start of by looking at the external environment and the internal strengths and weakness
- Then develop long term investments and strategies
- Evaluate the strategies and select one that is best
- Implement at all levels the strategies
- Then measure and evaluate results which acts as a feedback for a reference for the
next planning
What type of plans to managers use?
- Short range and Long-Range Plans
- Shot-range plans= 1yr or less
- Intermediate= 1-2 years
- Long range= 3 0r more years
- People vary in their capability to deal effectively with different time horizons
- Higher management levels focus on longer time horizons
Three Levels of strategy in organizations- Corporate, Business and Functional Strategies
- SBU’s are enlisted as separate companies the strategies and plans are considered as
business strategies
- Then under SBU’s is the finance, HR, Marketing and Marketing
- Most of the time the corporate strategies goes down by different business strategies

Document Summary

Hidden symbol in fedex means the speed of the delivery which is the arrow. Sun microsystems unique logo is the sun logo symmetrically. Clue natic companies uniqueness is that the whole logo itself symbolizes the key to the maze. How might captains be convicted to take better care of their human. Gov"t decided to pay captains a bonus for each convict that walked off the boat in. During a period of hyperinflation in chile, the story is told that the government"s imposition of the maximum price made it unprofitable for suppliers to sell bread the legal max. was below the cost of production. A simple prediction would be that bread would disappear from the shelves. Reduce size of the bread making it more profitable. Selling it in a domestic market and selling it at the higher price. Input new technology ( to make the production for efficient)